LGUs tap calamity fund

Source: Philippine Star

MACTAN, Cebu , Philippines - President Arroyo gave the go-ahead to local governments in Mindanao to use their calamity funds for cash and livelihood aid for farmers in areas severely affected by the El Niño phenomenon.

Mrs. Arroyo also told reporters here late Thursday that government financial institutions like the Land Bank of the Philippines and the Development Bank of the Philippines have offered to provide loan facilities of as much $100 million to private firms that need to lease generator sets to keep their businesses going.

The President earlier this week declared a state of calamity in Mindanao after both chambers of Congress failed to muster a quorum for an emergency session that would have led to the passage of a joint resolution authorizing additional generation capacity.

The declaration has automatically freed five percent of concerned local government units’ budgets for use as calamity funds. But critics have expressed fears that officials might use the proclamation to make anomalous purchases of power equipment.

Mrs. Arroyo noted that during a visit to Zamboanga del Norte on Thursday, local officials were giving rice subsidies to families of impoverished farmers.

“There’s a lot of Pantawid Pamilyang Pilipino there (Zamboanga del Norte). For those outside (the program), the governor is giving rice subsidy. Things like that they can do (with calamity funds),” Mrs. Arroyo said, referring to the administration’s conditional cash transfer program.

“This is as far as the harvest is concerned, the farmers, as far as the food is concerned, were okay because we already preemptively imported,” she said.

“Local government units can use five percent of their calamity funds where they choose to spend it because they have local autonomy,” she said.

Mrs. Arroyo also said she has issued a memorandum to Energy Secretary Angelo Reyes and National Disaster Coordinating Council chairman Norberto Gonzales detailing measures that need to be carried out to promptly ease Mindanao’s power problems.

The measures include having the National Power Corp. (Napocor) tap an additional 5.5-megawatt unit from the Southern Philippines Power Corp. in Sarangani province, requiring Napocor and the Power Sector Assets and Liabilities Management Corp. to resume operations of the 100-megawatt (MW) Iligan Diesel Power plant, and operating available “embedded generators” from independent power producers and private firms like the Davao Light and Power Co., Mindanao Energy Systems Inc., Philippine Sinter Corp., Cotabato Light and Power Co., Paper Industries Corp. of the Philippines, and Pacemco Holdings Inc.

She also directed Reyes to expedite the repair of the Sangali-Pitogo 138 kilovolt line in Zamboanga City and the Agus 2-Kibawe 138-kilovolt line in Lanao del Sur.

Blackouts to continue

Meanwhile, blackouts are expected to continue as all grids have recorded deficiencies, according to the National Grid Corp. of the Philippines (NGCP).

An NGCP report said Luzon has incurred a power gap of 440 MW due to the failure of Malampaya natural gas facility in Northwest Palawan to deliver fuel to the 1,200-MW Ilijan, 1,000-MW Sta. Rita and 500-MW San Lorenzo plants due to technical problems.

Contributing to the power deficiency was the emergency shutdown of Kepco Philippines Corp.’s Malaya units 1 and 2. The two units contribute around 360 MW to the Luzon grid.

The Magat power plant in Isabela, meanwhile, has not been operating since March 10 due to the falling water level at the Magat dam reservoir.

Sweetheart deals

Liberal Party presidential candidate Sen. Benigno “Noynoy” Aquino III and his running mate Sen. Manuel Roxas II said a state of calamity in Mindanao might make it easier for the Arroyo administration to misuse funds.

“She (Mrs. Arroyo) might end up benefiting from the crisis of her own making,” Aquino said in Surigao del Norte on Thursday, when asked about his opinion on the proclamation.

Aquino said that while it was Mrs. Arroyo’s prerogative to declare a state of calamity, there should be strict monitoring of disbursement of funds.

“There will be emergency purchases left and right. The irregularities might be advantageous to somebody,” he said.

“This government has shown its propensity to divert funds for political purposes. The people must make sure that the unscrupulous do not succeed this time,” Aquino said.

“They had nine and a half years, and the best they can come up with are the power barges polluting (the environment) and most expensive way of generating electricity,” he said.

“They did not act when the shortage was foreseen and when the EPIRA (Electric Power Industry Reform Act) was passed,” he said.

“I was hoping that somewhere things were corrected but right now, how would potential investors come in?” he asked.

Roxas, meanwhile, cited the Arroyo administration’s record of diverting funds for vital programs to vested pursuits.

Roxas cited as example the P728-million fertilizer fund that allegedly ended up in Mrs. Arroyo’s campaign kitty in 2004.

He said a temporary but expensive solution is the acquisition of diesel power barges, but he warned this could raise power rates in Mindanao.

Nacionalista Party standard-bearer Manuel Villar said measures should be put in place to prevent officials from abusing their powers under a state of calamity.

“There must be safeguards in place to prevent abuses in line with the fund releases that the declaration calls for. There must be full transparency in all spending that will emanate from the declaration of state of calamity,” Villar said.

Makati Mayor and vice presidential candidate Jejomar Binay said the national government should provide funds to affected LGUs, many of which are cash-strapped.

“It is very unfair for Malacañang to pass on to the local governments the burden of dealing with a so-called power crisis caused by national government neglect,” he said.

Up to LGUs

Meanwhile, Gonzales said it’s up to provincial governors in Luzon and the Visayas to declare a state of calamity in their respective jurisdictions if necessary.

“As regards the state of calamity, if you are talking about wider areas, the President will be the one to declare it. But every province can actually declare a state of calamity. It would depend on the governor,” Gonzales said.

“Some are questioning us why we did not declare a state of calamity in some provinces. But it would be up to the governor,” he said.

“The governor would not need the president for that. That is the judgment call of the governor,” he added.

Gonzales said governors know best the situation in provinces.

Special committee

The Philippine Chamber of Commerce and Industry (PCCI), for its part, wants a special government-private sector committee formed to address the power crisis and thresh out a long-term energy policy.

“Our country is now facing formidable challenges in the energy and power generation sectors, further complicated by a burgeoning population. Government should seriously look into this proposal of PCCI and consider its prompt creation and mandate,” said Benedicto Yujuico, PCCI vice president for energy, utilities and telecommunications committees.

In a statement, the PCCI said the proposed committee should tackle key power issues including price competitiveness and renewable energy.

PCCI energy committee chairman Jose Alejandro said the country should now consider nuclear power as a long-term solution to its energy problem.

“It is timely indeed for the government and the private sector to start discussions and review the merits of nuclear power as a long-term option while realizing that nuclear power is now a matured and proven technology that provides clean electricity at predictable and competitive costs,” Alejandro said. - Paolo Romero, Aurea Calica, Delon Porcalla, Christina Mendez, John Unson, Jose Rodel Clapano,, Charlie Lagasca, Donnabelle Gatdula, Alexis Romero, Elisa Osorio